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Market Update

Australain Manufacturing Sector Contracts and Corportate Profit Plunges

Author: Marcus Jacob
Last Update: 9:48 AM ET September 01 2014

5:00 PM Sydney, Australia – Australian market indexes closed higher on the first day of September and manufacturing sector index contracted in August and corporate profits plunged nearly 7% in June quarter.

Australian stocks opened lower but managed to climb higher after the latest survey on manufacturing and corporate profits painted a mixed picture.

Australian manufacturing sector contracted in August and the performance index dropped 3.4 points to 47.3 from the previous month. Any reading below 50 indicates contraction. The data was reported by the private Australian Industry Group.

The Australian Bureau of Statistics reported corporate gross operating profits in June quarter plunged 6.9% after increasing 3.1% in March quarter.

Australian dollar closed at 93.41 U.S. cents and on the stock market turnover declined to 565 million shares worth $3.27 billion.

ASX 200 index edged up 3.90 to 5,629.80 and the broader All Ordinaries index rose 4.70 to 5,629.30.

Also, investors paid attention to the official read on Chinese manufacturing sector. National Bureau of Statistics reported official Purchasing Manager’s Index declined to 51.1 in August from 51.7 in July, but remained above 50 indicating expansion.

Stocks in Review

ERM Power Ltd increased 1.8% to $1.96 after the electricity and gas provider agreed to sell its interests in West Australian gas assets to Empire Oil & Gas Limited for $16.34 million.

The electricity and energy provider also agreed for a subscription and proposed rights issue a value of up to $7.5 million.

National Australia Bank Ltd. edged lower 0.2% to $35.12 after the financial services provider plans to divest its minority stake in Great Western Bank through an initial public offering in America.

Transfield Services Limited declined 2.9% to $1.70 after the infrastructure development service provider reported revenue in the year ending in June increased 1.6% to $3.75 billion from $3.69 billion a year ago period.

Net in the year swung to profit $52.8 million compared to a loss of $254.5 million and diluted earnings per share swung to 13.4 cents from a loss of 46.7 cents per share a year earlier.

Woodside Petroleum Limited gained 0.9% to $43.07 on reports that Seven Group Holdings Limited acquired $100 million stake in the oil and gas explorer.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc